Where did the Debt Time fly?

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It feels like that giant weight of credit card debt (upwards of $23,000 at one point) was on my shoulders for so long, but the weight was lifted so long ago with our final credit card payment that I hadn’t thought about the difficulties and struggles we went through to pay it all off…in about a year or two at that! That was until my wife was talking with a friend who (finally) graduated with her PhD and is now out on her own in the “real world”. She has student loans, some credit card debt, a new car payment (although she went more frugal with a Hyundai Elantra than my first or second car out of college), but what struck me into recalling that debt was what my wife said:

I didn’t really understand what he was doing back then to pay it off, and I was afraid it wouldn’t work, but Mike knew what he was doing and got it all paid off pretty quickly without paying much interest.

I honestly had to think “What the heck did I do to make her afraid about our debt?” because I seriously couldn’t remember how I paid off the credit card debt. Then I remembered! I can’t believe that something I focused on for a good year+ on this site was forgotten so easily:

Using Balance Transfers to Pay Off Credit Cards

Now, I can forgive myself for forgetting something that was paid off just over 5 years ago, but not something that threatened our livelihood for about 7 years before then if we were to miss a payment, lose a job, etc. But it was nostalgic looking back now to recall the games and tricks I played with the lenders. Getting new cards with 0% balance transfers, paying a small fee and moving the money around so I didn’t have to pay interest on $20k+ in debt.

That’s how I got us out of credit card debt, but what’s it like now? Is it as easy to play the 0% game? I know that near the end of our payoff, credit card companies began removing the caps (usually 2-3% max) on fees charged.

For example, a 3% fee on transferring $10,000 is $300, but I recall the fee was usually capped at $75-100 for most cards. Depending on your current interest rate and principal owed, it could be the difference between staying with your existing card and paying the interest or taking the big fee just to lock in 0% or so for 6-12 months.

It’s a little scary knowing now that I didn’t make sure to educate my wife enough on what I was doing, in case something happened to me, so it’s a lesson to make sure your spouse is fully-engaged in the household finances, whether they like it or not. At least you should be bringing up the budget or checkbook or Quicken or whatever you use to show where you stand each month.

I’m interested to know who is currently playing this shuffling game to get out of debt, how easy it is, and how it’s affecting your credit score. Luckily, I did this all when we weren’t looking for a mortgage because all the new credit cards I got would have killed my score.

Wow, I still can’t believe it’s been over 5 years since we paid off our credit card debt. Then we paid off our auto loans (while accruing some new ones and paying those off) and finishing off with student loans.

In fact, we’ve even paid off about 30% of our house, mostly in the last 4-5 years thanks to the snowball effect of paying off debt one at a time until you’re down to just one debt. It’s actually been since Feb, 2011 that we paid off our $80,000 second mortgage, and we’ve paid off another $30,000 or so on our primary loan since then. We’re not underwater on our house like some of our neighbors. We might even be able to make a very small profit (if it were summertime and we could showcase our pool on a hot day), but no plans on moving right now. We have more space than we use, we like the location and we’re familiar enough with the structure to be comfortable for now.

So let me know in the comments what you’re doing with your debt, whether the “game” option is still out there and what other creative or traditional methods are working best for you all!

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Clever Dude

7 Comments

Awesome job! I only have a 0% credit card balance, and never carried CC debt, but if playing the game is easy, you have to make sure you win the game and are able to pay it off before the end of the 0% deal. I think mine reverts to 24.99% yikes!

@Pauline, good luck with your debt. I had a spreadsheet that tracked the timing of every offer and made sure to call in advance of the expiration so I didn’t roll over into an interest-paying time period. I have no idea how much I saved us by doing this (I was also doing this before fully working on paying it off, so it went on for years), but I would be at least a couple grand if not more.

Wow, this is really interesting. This is exactly my brother’s problem! He is still under debt and he has no idea how to get out of it, he’s not even trying to pay it. Thanks for sharing this, I might talk him into doing this.

I remember a past coworker that was playing a similar game with those low-interest credit card checks that get mailed out all of the time. But he was doing it to live, not to pay off debt. I thought he was nuts. Especially when he had about $30,000 in that debt within a year and a half…

Once upon a time I had $50k in debt between a car loan and credit card debt; I too did the balance transfers to eliminate it quicker. I had a positive net worth due my retirement accounts, but still owed so I had little savings back then. I cleared all my consumer debt before my wife and I got married she was much more financially diligent then me back then and I wasn’t going to bring the debt to the marriage.

To give you more hope currently we have a net worth over $1 million, so you can go from broke to wealthy in less than 10 years 🙂